John Cutsey admits it is probably not the best time to invest in expansion in the United States.
With almost all of FDM4 International’s business in the U.S., the North Bay software company needed a support and service presence there to be closer to their West Coast customers.
The president of FDM4 liked the pitch from Henderson, Nevada city officials and opened a design and customer support operation last April.
Anyone who orders a pair of shoes online from the Jessica Simpson Collection website accesses software made by the 20-year-old company, which creates enterprise application software. They have a whole suite of products geared to order fulfilment, inventory and procurement, warehousing and the financials related to e-commerce.
FDM4 had maintained a small Las Vegas billing office, but the three-hour time difference to work with their West Coast clients just wasn’t working.
Despite a foundering U.S. economy, their customers still need backoffice expertise in online apparel sales. And with a good chunk of them in Los Angeles, San Diego, San Francisco, Portland and Denver, “we had to be there for them,” says Cutsey.
Even flying out of North Bay to their East Coast customers was getting pricey with a $1,500 plane ticket to make a trip to Philadelphia, New York, Charlotte, Atlanta and Dallas.
“From Vegas you can fly to Philadelphia for under $500,” says Cutsey. It’s also better than waiting for connections in Toronto.
Relocating their Las Vegas office to Los Angeles or San Francisco didn’t make sense.
The traffic and pricey real estate in those cities were not places where he wanted to send his people.
The new office in Henderson is “14 minutes” from McCarren International Airport.
Cutsey, who travels there once a month, calls it a smog-free and clean “slice of heaven.”
The founder of EBay lives just up the road, he says.
Rather than construct a new building, they leased a 7,500-square-foot space.
The company transferred 10 of its 60 employees to the Henderson office, where it is headed by John’s son, Mike Cutsey. They expect to hire 20 to 30 people in the next three years in sales, customer support and programming.
Cutsey says, it is probably the worst time to be expanding in Vegas, given shaky U.S. consumer confidence, but he made the decision to expand more than a year ago.
His clients are mostly apparel makers, including the likes of Bella and U.S. T-Shirt, along with along with MacPherson’s (the largest U.S. distributor of craft suppliers in the U.S. and Video Products Distributors.
These companies also contract FDM4 to handle their backoffice work out of the servers at their Airport Road office. Most of FDM4’s sales are licensing of software developed in North Bay.
In the 1970s, Cutsey was selling typewriters, calculators and dictation systems before moving into electric typewriters, which led them to selling software for Qantel computers. He ended up developing his own software and formed FDM4 International (Financial Distribution Management, 4th generation language).
The unfavourable currency exchange has been tough on the company’s bottom line. “For every million we sold in the U.S, we used to bank a million and a half,” says Cutsey. That isn't happening anymore.
Yet, a sluggish economy is an opportunity to be creative and try new things.
In competing against the likes of SAP and JD Edwards, “We have to be smarter, think better, design things more, and create. These types of challenges make us think. Two years ago, I was too complacent because business was good,” says Cutsey.
“You can’t be good, have to be better than good. You need to have deep, deep valleys because it makes you think differently and you gotta be creative and that’s how you can search to have those higher peaks.”
He wants to form alliances with resellers to remarket their software and hard goods in industrial and auto supply, or any sector that maintains an inventory, purchasing and warehousing and uses e-commerce.
He would like to partner with fashion companies that sell to big retailers like Holt Renfrew, Macy’s, Armani, Saks Fifth Avenue, and form closer alliances with IBM and Microsoft.
“We need to offer our solution to a vertical market using a more broad type of hardware and operating systems platform. Our software could run on known platforms that are stable worldwide.
“Our products will become more appealing to resellers to want to buy it if it runs on a known name.”
